If a resident of Canada moves to another country, and severs residential ties with Canada, he/she is deemed to be an emigrant of Canada for tax purposes. When this happens, the person is deemed to have disposed of almost all their property and re-acquired it at fair market value. Tax will be payable on any capital gains arising from the deemed dispositions.
- Emigrants are not eligible for:
- Canada Child Tax Benefit (CCTB)
- Child Disability Benefit (CDB)
- Universal Child Care Benefit (UCCB)
- GST/HST credit
It is important that you report your date of emigration to Canada Revenue Agency (CRA) as soon as possible.
If you are participating in the Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP), you have to pay the balance of the funds you withdrew by whichever date is earlier:
- 60 days after you become a non-resident; or
- the date you file your tax return for the year.
If you continue to receive Canadian-source income after you emigrate, tax of 25% will be withheld from certain types of income. The most common types of income subject to withholding tax are:
- non-arm’s length interest
- rental payments
- pension payments
- Old Age Security (OAS) pension
- Canada Pension Plan (CPP) or Québec Pension Plan (QPP) benefits
- retiring allowances
- registered retirement savings plan (RRSP) payments
- registered retirement income fund (RRIF) payments
- annuity payments
The tax treaty between Canada and your new country of residence may reduce the rate of non-resident withholding tax on some types of income.